A family in Brooklyn owns their brownstone outright. For 40 years, it’s been the center of their lives. They assume their will is sufficient to pass it to their children. What they don’t realize is that a will doesn’t avoid probate. Upon their passing, that beloved home becomes an asset subject to the oversight of the Kings County Surrogate’s Court—a process that is public, costly, and can take months, if not years, to resolve.
This is a scenario my firm and I have seen countless times. A house is more than an asset; it’s a legacy. The question of whether to place it into a trust is not a simple yes-or-no. It is a question of control, privacy, and stewardship.
Avoiding Surrogate’s Court is the Primary Goal
The single most compelling reason to place your home into a trust is to bypass the probate process. When you die with a home titled in your individual name, your will acts as a set of instructions for the Surrogate’s Court. The court must then validate the will, appoint an executor, and supervise the administration of your estate. Every step is part of the public record.
A trust changes this dynamic completely. A trust is a private legal agreement. When you transfer your home’s deed into a properly structured trust, you are no longer the individual owner—the trust is. You appoint a trustee—often yourself, initially—to manage the property. Upon your death, a successor trustee you’ve designated steps in to manage or distribute the property according to the private terms you set. No court proceeding is required for this transfer. The transition is private and immediate. This is not about avoiding taxes—it’s about avoiding unnecessary delay and public intrusion during a family’s most difficult time.
The Critical Difference: Revocable vs. Irrevocable Trusts
For real estate, the type of trust you choose is critical. The decision between a revocable and an irrevocable trust hinges on your ultimate objective—flexibility or asset protection.
A revocable living trust is the most common vehicle for holding a primary residence. It offers maximum flexibility. During your lifetime, you retain complete control. You can sell the home, refinance the mortgage, or even dissolve the trust entirely. For tax purposes, the IRS disregards the trust, and you continue to claim any property tax exemptions you’re entitled to. The home still receives a step-up in basis upon your death, which can be a significant tax benefit for your heirs.
An irrevocable trust is a far more rigid instrument. Once you transfer your home into an irrevocable trust, you cannot simply take it back. You relinquish control. Why would anyone do this? Primarily for asset protection. An irrevocable trust can be structured to shield the home from future creditors or to begin the five-year look-back period for Medicaid eligibility. This is a deliberate, strategic decision often made in high-net-worth planning or for long-term care contingencies. It involves a serious trade-off between control and protection that must be weighed carefully.
The Mechanics of the Transfer
Placing your home in a trust is more than signing a trust document. The property must be legally retitled. This involves preparing and recording a new deed, transferring ownership from you as an individual to you as the trustee of your trust. This is a crucial step that is often overlooked.
If there is a mortgage on the property, we must address the lender’s “due-on-sale” clause. While federal law—specifically the Garn-St. Germain Depository Institutions Act of 1982—prevents a lender from calling the loan due when a home is transferred to a revocable living trust, communication with the lender is still a prudent step.
Once the property is held by the trust, the trustee is bound by a strict fiduciary duty to manage it according to the trust’s terms and for the benefit of the beneficiaries. In New York, a trustee’s authority is broad and outlined in the Estates, Powers and Trusts Law (EPTL). For instance, EPTL § 11-1.1 grants fiduciaries the power to manage, sell, or lease real property held in the trust, providing the legal framework for the stewardship you intend.
The decision to put a home in a trust is a foundational piece of generational planning. It’s about ensuring the transition of your most significant asset is handled with intention and privacy. The right path depends entirely on your family’s circumstances and your vision for the future.
The first step is not to draft a document, but to clarify your long-term goals for the property and the people you wish to protect. I suggest starting with a review of your current deed and a discussion about your intentions for the property’s future. This conversation frames everything that follows, long before a single legal instrument is considered.
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